FCC Anticipates Stage Three Reverse Auction Will End December 1st

Posted on November 30th, 2016 by

The FCC has announced that it anticipates the reverse auction currently underway in stage three of the TV incentive auction will end on December 1st, with up to five rounds occurring that day if necessary. As soon as it ends, the FCC will announce the total asking price from the broadcasters for their voluntarily relinquished spectrum. The broadcasters’ two previous asking prices — $86 billion and $55 billion — were too high for the forward auction bidders, triggering another stage of the auction.

The stage three forward auction will follow the end of the stage three reverse auction, probably beginning sometime next week. Whether that forward auction will take several days or end in a single day, like the last one, remains to be seen. If the forward auction bidders are not willing to pay the reverse auction total, we’ll be headed to a fourth stage where the reverse auction clearing target will be 84 Mhz – a drop of 24 Mhz (four TV channels) from the stage three clearing target of 108 Mhz.

From a timing perspective, the FCC could begin a stage four reverse auction in December, but that substantially depends on how long the forward auction takes, and how close we get to the Christmas holiday. If the forward auction is short, it would not surprise us if a stage four reverse auction started in December, was suspended for the holidays, and then re-started in early January.

Anti-collusion rules remain in effect. Exercise caution in your discussions. Some third parties are out soliciting already for channel share partners after the auction. Those types of inquiries are fraught with potential anti-collusion rule violations, so be careful.

The auction repack procedure is still being debated, with NAB weighing in heavily to secure additional flexibility on the construction buildout periods for affected stations. The task of adopting a repack procedure has been delegated to the FCC staff. We fully expect to see the finally adopted procedures before the end of the auction.